India's maritime ambition goes global

NEW DELHI: India is going global with its maritime ambitions. The government is setting up Indian Ports Global â€“ a dedicated company like Dubai Port International and Singapore's PSA International â€“ that will invest and acquire stakes in overseas ports and container terminals.

To begin with, the cash-rich port trusts that are owned by the government will pump in Rs 2,500 crore into India Ports Global, which will initially act as the shipping ministry's investment arm. The company will then leverage this amount to raise another Rs 5,000 crore from the market by issuing tax-free bonds, officials involved with the initiative said.

In this year's budget the government has empowered the shipping ministry to issue port sector bonds to the tune of Rs 5,000 crore. "The finance ministry has given consent to us to authorize any entity to raise the bonds. We feel Indian Port Global is the best choice," said an official. Barring Kolkata and Cochin port trusts, the major ports â€“ such as Jawaharlal Nehru Port Trust, Mumbai Port Trust, Paradeep, Mangalore and Kandla â€“ are expected to chip in with the initial contribution.

The idea is to invest in ports with large traffic to and from India, which would translate into interest in ports in south east Asia and Australia. Officials said an international presence for India is required, amid its growing influence in international trade, which was estimated at $600 billion in the last financial year and exports are projected to double by 2014. Nearly 90% of India's trade is through marine lines.

In various other spheres, the government is trying to showcase India's growing clout. For instance, oil companies are on a global hunt to meet the country's growing energy requirement. The story is similar in case of the coal sector where a dedicated company, Coal Videsh, is adding to private sector's acquisition binge. Officials said that a combined effort from the ports is required since they would not be able to compete with the global might of giants like Dubai Ports, PSA International and Maersk.

Setting up of Indian Ports Global is contingent upon cabinet approval. "We will engage a consultant on how to go about this plan. It will be a small structure like a corporate body with professionals," a senior ministry official said.